Closing Time: Flutter And Caesars Secure Key Approvals For US Sports Betting Acquisitions

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Flutter and Caesars deals

Two of the biggest deals in US sports betting are almost complete. 

Flutter will close its acquisition of the remaining shares of FanDuel on Wednesday 30 December, the company announced this week. 

Around 99.99% of Flutter shareholders voted to approve the deal.

Meanwhile, Caesars announced on Tuesday it had cleared antitrust measures for its acquisition of William Hill.

It also secured approval for the deal from state gaming regulators in West Virginia and Mississippi.

The tie-up still needs rubber-stamping by other state gaming commissions including Nevada, New Jersey and Pennsylvania.

The English High Court must also approve the deal, but Caesars said it expected to close in March 2021.

What does it all mean for US sports betting?

It’s not surprising that Flutter shareholders supported the $4.2 billion deal to buy up a further 37% stake in FanDuel Group.

The price gave FanDuel an enterprise value of $11.2 billion; a discount of over 40% compared to the $20.3 billion value of DraftKings.

There are several reasons the previous private equity owners agreed to sell for that discount. For starters, a minority stake without operational control is simply worth less. Plus they got the cash immediately rather than waiting until 2023.

But for FanDuel users, not a whole lot will change. Perhaps the company will be even more aggressive on bonusing now it owns 100% of the upside. But that’s not yet clear.

Closer tie-in between Caesars and William Hill

As for the $3.7 billion Caesars/William Hill deal, customers might notice a bit more of a change.

Caesars said the merger would help its product in several ways including:

Of course, the tie-up may not end the M&A party for Caesars.

Some analysts think the company will spin out the combined online betting and gaming business and list it in the US. Such a company could generate $600-$700 million in pro forma net revenue in FY2021.

And given the valuation multiple assigned to peers like DraftKings and Penn National Gaming, a spin-off could be very valuable indeed.